02-20-01 Regular
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HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
February 20, 2001
The meeting was called to order by Chair Harms at 7:00 p.m.
HRA Members
Present:
Thomas Harms; Joan Heimberger; Kristal Stokes, and Dan Linnihan.
HRA Members
Not Present:
Michael Sandahl.
Staff Present:
Samantha Orduno, Executive Director; Steven Devich, Acting City
Clerk; Bruce Palmborg, Community Development Director; John
Stark, Community Development Manager; Bruce Nordquist, Housing
and Redevelopment Manager; and John Dean, City Attorney.
Item #1
PPROV ALOF'MINUTES'"
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MIStokes, S/Linnihan to approve the minutes of the Reqular HRA Meetinq of
January 16, 2001.
Motion carried 4-0.
HRA Meeting Minutes
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February 20, 2001
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Item #20F?PORTUNITYFOR7.CITIZEN"S,TO.*AIDDRESS
None.
Item #3 HRA APPROV Al.:.OF AGEND~
M/Stokes, S/Linnihan to approve the aqenda.
Motion carried 4-0.
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Item #4 :CO~SE~CAI2END'AR e.
A. Approved resolution authorizing purchase of 6444 Clinton Avenue for rehabilitation
project under New Home Program S.R. No. 17
HRA RESOLUTION NO. 807
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED
AT 6444 CLINTON AVENUE FOR THE NEW HOME PROGRAM
This HRA Resolution appears as HRA Resolution No. 807 in HRA Resolution Book
NO.6.
M/Helmberger, S/Stokes to approve the consent calendar.
Motion carried 4-0.
Item #5
\T"RACT FOR
C. S.R.NO.1
CONSIDERATION OF SECON
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PRIVATE REDEVEI!G)PMEN;r;'1 WI
ENDMEN:r :IG) C
BES'T BUY.CG).
Community Development Manager Stark reviewed Staff Report No. 18 regarding
consideration of a second amendment to a contract for private redevelopment with Best
Buy Co., Inc.
Commissioner Linnihan asked if the acquisition of the property as it becomes
available is just for business properties.
Mr. Stark responded that it was.
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HRA Meeting Minutes
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February 20, 2001
MIStokes, S/Helmberger to approve the second amendment to the contract for
private redevelopment with Best Buy Co., Inc.
Motion carried 4-0.
Item #6
NSION TQ,:"'(;SM:;
SING~e0NTiNGENCIES
Community Development Manager Stark reviewed Staff Report No. 19 regarding
consideration of a 45-day extension to CSM Investors II, Inc. for completion of closing
contingencies in the Lyndale Gateway area. Mr. Stark indicated that staff is not
recommending approval of another 45-day extension.
Murray Kornberg, CSM Corporation, stated he feels that CSM and Walgreens have
made significant progress towards a lease agreement. He stated that all of the remaining
business issues have been resolved. He still feels strongly that Walgreens will move
ahead with this lease.
Commissioner Linnihan stated he felt that the HRA should have asked Mr. Kornberg
what the HRA could do to get this lease done. He asked what the HRA could do now.
Mr. Kornberg thanked the HRA for their offer, but stated that he feels it's just a
matter of the lease working it's way through this process.
Commissioner Linnihan asked if Walgreens could supply some document short of a
formal lease to provide assurance to the HRA that they would proceed with the project.
Mr. Kornberg stated that he was already trying to pursue such an avenue.
Mr. Stark stated that he had received a letter several months ago that stated that
Walgreens had approved the site and was proceeding ahead with it.
Commissioner Heimberger asked if Mr. Kornberg has talked to the businesses in
the area.
Mr. Kornberg stated that he has made some preliminary contacts but has not talked
to all property owners.
Steve Sawitzke, A-1 Foam, 7608 Lyndale Avenue, stated that he urged the HRA to
hold to the original extension and not extend it again tonight.
Chair Harms asked if the action recommended was to not renew the extension but
also not terminate the agreement at this time.
HRA Meeting Minutes
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February 20, 2001
Pat O'Brien, Arrow Appliance, asked the HRA to continue the process with
Walgreens since it appears so close to conclusion. He feels that this continuous state of
limbo can't go on.
Chair Harms stated that he felt that since Walgreens was told that the last extension
was the last deadline, the HRA must stick with the deadline.
Commissioner Stokes asked what happens if we don't grant the extension and CSM
signs a lease.
Commissioner Linnihan stated that all that is lost is the exclusive right of CSM to
continue. However, CSM can continue to pursue this on a non-exclusive basis.
MIStokes, S/Linnihan to deny a 45-day extension for the completion of closing
contingencies as described in the Contract for Private Redevelopment, contingent upon an
aqreement regardinq the schedulinq and cost allocation of the Lyndale Avenue
reconstruction proiect be made between CSM Investors II, Inc. and the City of Richfield.
Motion carried 4-0.
Item #7
Housing and Redevelopment Manager Nordquist reviewed Staff Report No. 20
regarding consideration of early acquisition strategy for Lyndale Hardware Store and
update of the project by the developer of City Bella, Gramercy Corporation.
Chair Harms asked for a more detailed explanation of what exactly is being asked
for and why $800,000
Mr. Nordquist stated that the developer doesn't feel ready to break ground until
August. Lyndale Hardware, however, will be ready to close the business in late spring.
This would enable the project to proceed on the time table.
Commissioner Linnihan stated that he saw the transaction as a bridge loan, and
asked staff if that was a correct assumption.
Mr. Nordquist stated that this was in essence what the $800,000 was.
Chair Harms asked why Gramercy Corporation is not willing to step up to the plate if
this is a no risk deal.
Mr. Nordquist stated that absent the $800,000, the Lyndale Hardware site might get
sold to someone else.
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HRA Meeting Minutes
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February 20, 2001
Executive Director Orduno stated that this is just an option and staff's attempt to
help solidify this development.
Mike Conlon, Gramercy Corporation, stated that they are aggressively pursuing the
financing for this project with FHA and private enterprise.
Chair Harms asked if someone else buys Lyndale Hardware, does it stop the
development.
Mr. Conlon stated that he would continue to pursue development.
Chair Harms asked what Gramercy is willing to give the HRA as assurance for the
$800,000 bridge financing.
Mr. Conlon stated that they were looking at this data and that they would pay the
costs of Kennedy and Graven and Ehlers and Associates.
Ernie Lindstrom, 7406 Fremont Avenue, spoke representing John Sieff for Lyndale
Hardware. Mr. Lindstrom summarized the negotiations between Gramercy Corporation
and Lyndale Hardware. He stated that he has not gotten his money from the Gramercy
option and has other purchasers interested in the Lyndale Hardware site. Mr. Lindstrom
stated that the $800,000 from the City was an attempt to satisfy the needs of the developer
and seller and allows the project to proceed.
Mr. Lindstrom felt that the $800,000 from the HRA be accompanied by a purchase
agreement for Lyndale Hardware.
Mr. Nordquist stated that the $800,000 would be accompanied with a non-
contingent purchase agreement.
Executive Director Orduno stated that the HRA is asking for the authority to proceed
with exploring this option.
Commissioner Stokes stated that she felt that this option is precedent setting and
puts the HRA in a position of broaching a transaction. Ms. Stokes stated that she feels
more comfortable if the HRA would be purchasing Lyndale Hardware outright.
Commissioner Linnihan stated that while this is a precedent setting idea, he liked it.
He further suggested that the staff pursue securing funds to serve as a financing bridge
fund for situations such as this.
Commissioner Heimberger asked if "but for" and other financing questions be
completed before or as in conjunction with this action.
Executive Director Orduno stated that this could be done.
M/Harms, S/Stokes that all the financial analysis and related date be completed by
the City's leqal Counsel and financial consultants at the developers expense before actinq
on this at the next meeting.
HRA Meeting Minutes
Motion carried 4-0.
Item #8
CLAIMS ANDPA,yRO~L
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February 20, 2001
MIStokes, S/Linnihan that the followinq claims and payrolls be approved:
FIRSTAR BANK
Section 8 Checks: 101539-101660
HRA Checks: 24611-24627; 25058-25103
$ 143,967.99
$10,825,989.81
Motion carried 4-0.
AD90URNMENT
The meeting was adjourned by unanimous co
Date.~pproved: March 19, 2001
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Steven L. Devich
Acting City Clerk
om Harms
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'Samjll' . a o~
Executive Director
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